Symmetry Partners

Symmetry Partners Tax Alpha

Helping Maximize After-Tax Results

Symmetry Tax Alpha

Solving the Challenges of Taxes and Investing

Taxes are one of the few certainties in investing, and they can significantly impact overall returns. With Symmetry’s Tax Alpha Program, investors with $1 million+ taxable accounts can substantially limit–or even eliminate–the long-term impact of capital gains taxes.

Investment success often comes at a steep cost—taxes. Depending on your tax bracket and the state where you live, long-term capital gains taxes could be as high as 40.8%, turning $1 million in gains into $408,000 in taxes, leaving just $592,000. 

Traditionally, there have been few ways to minimize their impact. You could choose not to sell, but potential gains will just keep accumulating, and you won’t be able to enjoy the returns you’ve earned. Or you could invest in tax-managed funds or ETFs that focus on minimizing capital gains. But this may not offer enough personalization and customization for larger portfolios. 

Direct Indexing is another, more recent solution. Owning individual stocks allows for a higher degree of tax management and customization that pairs losses with gains to reduce your overall tax burden. Unfortunately, the tax benefits of Direct Indexing typically disappear after 4 – 5 years. You can extract no further tax savings from your portfolio. It becomes “frozen.” 

HOW IT WORKS

Situations Tax Alpha Can Address

To specifically solve these tax management challenges, Symmetry Partners has developed an innovative Tax Alpha Program. Not only can it solve the problem of “frozen” portfolios, providing 15, 20, or even more years of tax savings, it can also address other typical situations, such as transitioning from a highly concentrated portfolio, transitioning from one portfolio to another, or simply delivering a tax-efficient overlay on globally diversified portfolio with minimal capital gains.

Highly Appreciated Taxable Account

Concentrated Portfolio

Minimize Tax Cost of Transitioning

Minimize Capital Gains

Sales of a Business

Our Process

Understanding The Strategy

30% Long
Your Portfolio
Stocks/Bonds/ETFs
30% Short
30% Long
Your Portfolio
Stocks/Bonds/ETFs
30% Short

At the heart of all Tax Alpha strategies is a unique use of margin to borrow cash from your account using stocks, bonds, ETFs, or other assets as collateral. 

We use this borrowing power to build an extension that is typically 30% of account value long & 30% of account value short. (additional, more aggressive strategies are also available)

The 30% long & 30% short comprise hundreds of individual stocks that are different from any stocks you currently hold. 

As markets fluctuate over time and these hundreds of stocks rise/fall, we use a systematic process focused on harvesting tax benefits for you. 

Because some long stocks decline when markets fall and some short stocks decline when markets rise, this long/short approach may allow for more consistent tax benefits year after year, than typical tax loss harvesting. 

Even after fees and expenses, typical tax savings range from 2% – 4% each year. **

** Source: Quantinno

Symmetry Tax Alpha

Maximizing After-Tax Results

When it comes to taxes, delay and inaction can be expensive. The Symmetry Tax Alpha Program may help you realize substantial long-term tax savings via overlay and transition strategies while addressing other challenges such as concentration risk.

CASE STUDY

A Highly Concentrated Portfolio with Substantial Taxable Gains

For investors, the platitude, "every little bit helps," rings true. Symmetry's Tax Alpha strategies have the potential to generate tax savings for those individuals who are working to save for their retirement. In this brief video, Symmetry's Michael Storer, Regional Director, tells the story of a client that retained such tax savings at a critical point in their life.

Symmetry Tax Alpha

5 Tax Alpha Program Options

Core

Core Equity + Tax Benefits

Portfolio of individual stocks managed to mitigate risk with a goal to achieve strong, consistent tax benefits.

Overlay

Utilize Existing Holdings

Using current portfolio to help generate ongoing tax benefits.

Legacy

Transition Legacy Holdings

Transition current portfolio to new portfolio in a tax-efficient manner.

Business Sale

Minimize Tax Impact of a Sale

Generate losses in advance of a sale (or in year of a sale) to reduce the tax burden of the business sale

Exchange

Concentrated Stock Diversification

Tax-efficiently diversify one to a few equity holdings into a more diversified stock portfolio.

Delphi Plus

Tax Advantaged Strategy for the High Net Worth

Delphi Plus offers a differentiated approach that aims for exceptional returns and significant tax impact!

Extensive research by our partners at AQR has led to this evolution in tax-aware investing with an exciting new approach built to help close the gap between how investments perform and how wealth grows. Delphi Plus offers an investment strategy that is designed to:

  • outperform the equity market
  • with moderate levels of market exposure

While at the same time generating ordinary income losses.

While this solution is normally only available to Qualified Investors—with $5 million+ in investable assets, the “Educated Employee” exemption from the SEC means that Financial Advisors can also invest in Delphi Plus.  The account minimum is $250,000.

Now you have a way to make a significant tax-advantaged difference for your UHNW clients AND yourself.

Get In Touch

Take the Next Step

When it comes to taxes, delay and inaction can be expensive. The Symmetry Tax Alpha Program may help you realize substantial long-term tax savings while addressing other challenges such as concentration risk.

Your financial advisor, in partnership with Symmetry, can help you select and implement the right Tax Alpha strategy to enable long-term tax savings.

This material is for educational purposes and its intended use is for financial professionals.

Symmetry Partners, LLC is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered or exempted or excluded from registration requirements. Registration with the US SEC or any state securities authority does not imply a certain level of skill or training. Symmetry charges an investment management fee for its services. All Symmetry fees can be found in the Symmetry ADV Part2A located on the website at  www.symmetrypartners.com. Past Performance does not guarantee future results. All data is from sources believed to be reliable but cannot be guaranteed or warranted. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product,  or any non-investment-related content, referred to directly or indirectly in this material will be profitable, or prove successful. As with any investment strategy, there is the possibility of profitability as well as loss. Please note that you should not assume that any discussion or information contained on this website serves as the receipt of, or as a substitute for, personalized investment advice from Symmetry Partners.

Please check with your firm’s Compliance and/or OSJ for usage requirements.

Symmetry does not provide tax advice. Please note that (I) any discussion of U. S. tax matters contained in this material cannot be used by you for the purposes of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein; and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.

ESG (Environmental, Social and Governance) Investing Risk: ESG Investments may not be perfectly correlated to the broader market indexes they seek to replicate. Stocks screened by the index sponsor for ESG criteria may underperform the stock market as a whole or particular stocks selected for the Index will, in the aggregate, trail returns of other funds investment strategies screened for ESG criteria. The individual companies deemed eligible by the index provider may not reflect the beliefs and values of any particular investor and may not exhibit positive or favorable ESG characteristics. The components of the Index are likely to change over time.

Axiom Program Risks: The Symmetry Axiom program provides clients with individual security portfolio solutions designed around individual client preferences. The Axiom separately managed accounts (Axiom SMAs) can be index- or factor-based. The index-based solutions are designed to give clients exposures similar to popular market indices, with far fewer individual security positions. The factor-based solutions are designed to emphasize those factors [need to define/describe factors or refer to somewhere in the ADV where they are already described] the Research/Portfolio Management team believes will optimize risk-adjusted return. Both index-based and factor-based portfolios hold individual securities.

Tax-loss harvesting involves certain risks, including, among others, the risk that the new investment could have higher costs than the original investment and could introduce portfolio tracking errors into your accounts. There may also be unintended tax implications. Prospective investors should consult with their tax or legal advisor prior to engaging in any tax-loss-harvesting strategy.

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FRIDAY HOLIDAY CLOSURE

The Symmetry Partners offices will be closed on Friday, March 29. We will resume regular business hours on Monday, April 1.